Are Currency Controls Coming?

I started writing about the possibility in the late 1990s. And what’s the big deal about currency controls? Currency controls will make it impossible to escape the devastation of hyperinflation. And according to John Williams, it will show up in late 2014.

It is prudent to get some of your assets off shore now, while you still can, and that includes gold and silver. Who knows what’s coming in the precious meals arena?

Jim Sinclair has been telling you to Get Out of the System for many months. Bail-ins are coming. Increased taxes are a certainty. The groundwork has been laid for wealth confiscation. And currency controls are being discussed to sell. We can thank our spineless politicians for putting another nail in the dollar’s coffin.

Yesterday, there were reports from Drudge and Zero Hedge that stated JP Morgan and Chase changed their policy and that they were now prohibiting (limiting) all international bank wires and cash withdrawals. In fact, here is the letter they released, on their own stationary.

This was big news.

But then Forbes came out with an article that more or less refuted the Chase letter. I wonder why the “retraction” in Forbes? Was the letter causing too much heat? Was it leaked too soon? Was it a trial balloon? Time will tell.

So which interpretation of their letter is correct, the original Chase letter or the Forbes retraction?

Ed Steer goes along with the Forbes story, and I have no reason to disagree, but the “lunatic fringe” Ed talks about was only reporting on the information they had at the time, which included the release by Chase. I think he was a bit hard on them considering the timing of this.

Is JPMorgan Chase trying to control customers’ money by preventing wire transfers and limiting withdrawals?

That’s the fear after a couple of reports from Drudge and Zero Hedge noted a change in the bank’s withdrawal and wire transfer policies for small business checking accounts.

Chase says the fear is unfounded.

The reports are referring to a new $50,000 limit on monthly cash activity being imposed on small business checking accounts and a ban on outgoing international wire transfers on those accounts.

The ‘lunatic fringe’ has been in full cry on this ‘story’ for the last couple of days…and I refused to post anything on it until confirmation showed up in the mainstream media. It did yesterday, and I’m glad that all the hysterical b.s. is finally given the burial it deserves. You can’t believe everything you read on the Internet, dear reader. This news item was posted on the forbes.com Internet site early yesterday afternoon EDT…and my thanks go out to Casey Research’s own Marin Katusa for bringing this story to our attention.

Is JPMorgan ChaseJPM+0.39% trying to control customers’ money by preventing wire transfers and limiting withdrawals?

That’s the fear after a couple of reports from Drudge and Zero Hedge noted a change in the bank’s withdrawal and wire transfer policies for small business checking accounts.

Chase says the fear is unfounded.

The reports are referring to a new $50,000 limit on monthly cash activity being imposed on small business checking accounts and a ban on outgoing international wire transfers on those accounts.

Small business customers received letters from the bank stating that the changes are effective November 17. “These changes will help us more effectively manage the risks involved with these types of transactions,” the letter states.

One report dubs Chase’s new rules “a war on cash and a war on small business and individuals” and says the new rules will lead to “a totalTOT+1.31% cashless society that destroys all privacy and allows them to fine and fee the general population into serfdom.” Scary stuff.

The fear is that banks, and indirectly, the federal government have too much control over individuals’ money, which sits, in the form of deposits. Limiting withdrawals and keeping people from sending money overseas feels like capital control–a government attempt to prevent money from flowing out of the country. Think Iceland and Cyprus.

JPM says that’s not what’s happening here.

First, a quick visit to the bank’s business banking website shows that international transfers are still available–you just have to pay up for them.

The bank’s basic business account, Chase Total Business Checking, does not allow outgoing international wire transfers (it does allow them to come in) and cash activity is indeed limited to $50,000 per month. Cash activity means withdrawals and deposits. The account has a $10 monthly fee, which is waived with a $1,500 minimum daily balance.

Need to withdraw or deposit more than $50k? You can but you’ll have to pay more in monthly fees to do so.

Upgrade to Chase’s Performance Business Checking and there’s no cash activity limit. Plus, you get two domestic wires transfers per month at no charge and international wires are available for an additional fee. Of course, there’s a $20 monthly fee that’s waived if you can maintain $50,000 balance.

Upgrade even higher to the Chase Platinum Business Checking and get four outgoing wires per month at no charge and reduced pricing on additional wires. Again, no cash activity limit here but the Premium account has a whopping $95 monthly fee that is waived if deposit balances are $100,000 or more.

But let’s get back to that basic business account. Chase says you can still exceed the $50,000 cash activity limit but do it four times in a rolling calendar year and you’ll get automatically upgraded to the next level account.

So, no, there is no cash activity limit in the Performance Business and Platinum level accounts but you’ll have to maintain higher balances to avoid the larger monthly fees.

It looks like theses changes are more about Chase looking to generate more revenue from fees than an attempt to control capital.

This may not be an “issue” today, but rest assured, you have witnessed the future and the future is not far off. Take this as a shot across the bow. Take advantage of the time you have left to move off shore with some of your wealth and some of your precious metals. The trap will spring shut once the dollar gets into real trouble. Watch the dollar closely and as it starts to descend into the low 70s (currently just below 80) on the USDX, then the panic will set in and the article you just read will be real. Your domestic assets will not be allowed to leave the country and your dollar denominated wealth will be losing value by the day.

Yesterday I pointed out fallacies in Larry Edelson’s discussion of gold vs. the Dow. Bill Holter had a few comments on the article as well. He said, “Edelson is wrong, the Dow was 387 in September 1929 and bottomed at 40 in either 1932 or 1933. Gold nearly doubled from 1929 to 1933 while the Dow was down 89%. His argument should start from 1933, not 1929 as he does. He also neglects to point out that the Dow has companies rotate out and in over the years. Many of the companies have dropped way out of favor (Eastman Kodak) or are extinct (LTV, International Harvester) and were dropped out of the Dow before their swan song so the Dow is not a good measurement because it was not constant and was “managed” to make it look better.”

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